Sky Views: Russian deflections won't work for May

John Sparks, Moscow Correspondent

It has been a long, long year for the residents of Moscow. The state of Russian politics and the country's moribund economy do little to inspire but there is something else that has been irking them.

Muscovites have spent the last year watching the destruction and re-construction of hundreds of streets, pavements and parks in what must be one of the largest public works projects in Europe.

With the World Cup set to kick-off next July, the Russian authorities have been handed a rare opportunity to show off their capital and in a determined if rather desperate fashion, they have chucked at least £2.6bn into a multitude of urban improvement schemes.

Image:The spotlight is on Moscow as it hosts the World Cup

Over the course of the summer, I watched a hundred-odd workers skin the grass off one particular bank of the Moscow River, reshape it slightly with their shovels, then place thousands of square metres of new sod on top.

It looks slightly tidier than it previously did - but lots of people are grumbling about it.

London on the other hand, presents a very different scene. This week I have been taking in the sites after years spent abroad as a foreign correspondent and I have been struck by the British capital's transformation from a scruffy symbol of the past to the financial colossus of Europe.

Fuelled by three decades of spectacular growth, London does not need to worry about the cracked facades of derelict buildings - because there are very few of them left.

The battered city of the blitz as described by H V Morton's In Search of London is now studded with mega-projects like St Pancras and King's Cross and the soon-to-be opened Crossrail - not to mention the self-conscious charm of Camden High Street and Borough.

The one-and-a-half-bedroom flat I used to share on Buckingham Palace Road (I lived in the half-bit) has gone, replaced by a giant concrete monolith with multi-colour tabs in the window frames.

Friends and former colleagues told me they are preparing for the worst - even readying to leave - because they believe Brexit will trigger the city's declineJohn Sparks

However, I also discovered that these shiny piles of steel and glass are staffed by people who are increasing gloomy about the future.

Friends and former colleagues told me they are preparing for the worst - even readying to leave - because they believe Brexit will trigger the city's decline.

Why are they worried? Well, the prospect of losing tariff-free access to the world's largest economic block is part of it.

If Margaret Thatcher had an industrial policy, it involved selling Britain to giant car makers and others as a low-regulation launch-pad into Europe - and it worked.

Since 1993, Britain has been the biggest recipient of inward investment in the union.

London's skyline is dominated by the gleaming tower blocks of a multitude of foreign banks. But no Liam Fox-negotiated trade deal will save their expansive UK-based operations.

France and Germany have already decided that British-based financial institutions will be denied "passporting" rights to do business in what is the world's largest market.

The best the UK can hope for is a free trade agreement modelled on the recent EU-Canada deal. It removes tariffs on most goods and opens up certain sectors like telecoms and transport but it does not touch services.

That is a serious problem because the British economy is dominated by services - like banks, insurance companies, consultancies, legal firms and the like. Altogether, services make up 80% of Britain's economy - it's what the UK does.

Image:Theresa May will be under intense scrutiny as the UK negotiates with the EU

Ever-optimistic Tory ministers argue Brexit could have a "positive effect" by reducing Britain's "dependence on the city".

The country will be forced, they argue, to become more innovative and productive. We will learn to make new things.

Alternatively, the Government's finances may deteriorate as the politicians struggle to live with new realities.

Certainly, London's status as the continent's financial capital is under threat. Confidence is leaking - and a period of stagnation and introspection awaits (economists are pessimistic about the UK's short to medium-term outlook).

Conversely, deep-rooted financial difficulties do not seem to trouble the small group who run Russia.

President Putin & co can divert and deflect with new museums, parks - and the odd international sporting event. It is easier to do than reform.